Presenter Information

Jingying Xu, Colby CollegeFollow

Location

Diamond 341

Start Date

30-4-2015 1:00 PM

End Date

30-4-2015 3:25 PM

Project Type

Presentation

Description

This paper investigates a lesser-known effect of innovation on the productivity of manufacturing firms in China. Innovation is a powerful vehicle for new firms to enter the market and compete with established firms. Innovation plays a key role in the productivity of firms and it matters for all types of firms, new as well as established. The ratio of new product output to the firms total outputs is used to measure innovation ability in this paper. A higher ratio is expected to have a positive impact on a firms productivity since new products are likely to be more differentiated than old products from other firms goods, which allows for a higher mark-up and thus greater profits. Comparisons of innovation ability difference are conducted for different types of ownership, such as: domestic firms, foreign invested enterprises, wholly foreign owned enterprises and various forms of joint ventures. Different measures of productivity, such as: labor productivity and total factor productivity are implemented in this paper. After controlling for a number of factors, I find a significantly positive relationship between innovation and productivity across all types of firms. In order to increase productivity, firms in China should enhance their ability to innovate.

Faculty Sponsor

Andreas Waldkirch

Sponsoring Department

Colby College. Economics Dept.

CLAS Field of Study

Social Sciences

Event Website

http://www.colby.edu/clas

ID

986

Included in

Economics Commons

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Apr 30th, 1:00 PM Apr 30th, 3:25 PM

Innovation And Productivity: Evidence From China

Diamond 341

This paper investigates a lesser-known effect of innovation on the productivity of manufacturing firms in China. Innovation is a powerful vehicle for new firms to enter the market and compete with established firms. Innovation plays a key role in the productivity of firms and it matters for all types of firms, new as well as established. The ratio of new product output to the firms total outputs is used to measure innovation ability in this paper. A higher ratio is expected to have a positive impact on a firms productivity since new products are likely to be more differentiated than old products from other firms goods, which allows for a higher mark-up and thus greater profits. Comparisons of innovation ability difference are conducted for different types of ownership, such as: domestic firms, foreign invested enterprises, wholly foreign owned enterprises and various forms of joint ventures. Different measures of productivity, such as: labor productivity and total factor productivity are implemented in this paper. After controlling for a number of factors, I find a significantly positive relationship between innovation and productivity across all types of firms. In order to increase productivity, firms in China should enhance their ability to innovate.

http://digitalcommons.colby.edu/clas/2015/program/250